Finding the Right Shield for Green Investments
Investing in renewable energy can be a bumpy ride. The ups and downs can be tough on investors. So, what can they do to protect their money?
Safe-Haven Assets: Your Shield
They need safe-haven assets. These are investments that can help reduce risk. Think of them as a shield.
Strong Shields
Gold and green bonds are strong shields. They can protect investments from both big drops and big gains. This is true no matter how much of the portfolio they make up. They are reliable friends in the world of investing.
Less Dependable Friends
VIX and Bitcoin are not as strong. They can help, but only if they make up a small part of the portfolio. They are like friends who are good in a pinch, but not always dependable.
The Data Speaks
This is what the data shows. It covers a time from February 2, 2018, to February 20, 2023. This includes the Covid-19 outbreak. The findings hold true before and during the pandemic.
Who Benefits?
- Investors and portfolio managers can use this info to protect their renewable energy investments.
- Short-sellers can also use it. They can manage the risk of big gains in renewable energy investments.
The Balance of Risk
But here's a thought: Is it always good to reduce risk? Sometimes, taking on some risk can lead to big rewards. It's all about balance. Investors need to think carefully about how much risk they are willing to take.
